Canadian government response to copyright and digital policy issues

The Internet and other digital technologies are transforming the everyday lives of all Canadians. The pace of change requires our legislative frameworks to be continually reviewed and adapted to these changing needs. The current government is tackling these challenges on numerous fronts including most recently in respect of copyright, anti-spam law (CASL), and privacy.

Copyright

The government has now started its mandatory review of the Copyright Act. The review was proceeded by a letter from Minister Bains and Heritage Minister Joly, both of whom share the copyright file, which provided some guidance to the INDU Committee. The letter underscored the importance of copyright to all stakeholders including that:

It is vital our modern economy. “This legislation is a key part of our suite of policy tools that promote Canadian creativity and innovation. A well-functioning copyright framework should contribute to a marketplace and environment where users have access to world-class content and services for information and enjoyment, for education and cultural heritage, and to inspire follow-on creation and innovation.”

“Many copyright stakeholders have experienced chronic disruption with the advent of the digital marketplace. Many business models related, in whole or in part, to copyright have changed significantly. New digital intermediaries and services have taken on significant roles, leaving some feeling ill-served by emerging value chains for copyrighted content.”

Intellectual property, ‘including copyright, is the currency of the modern economy” and “Canada must use the copyright regime to more strategically allow its entrepreneurs to innovate, grow to scale and create jobs here at home. We have heard that for many musicians, authors, developers, and several other creators, copyright protection is central to translating their achievements into earning a living, being competitive on the market, and continuing to create.”

The Committee should review and take into account “emerging and forward-looking considerations”.

Canada will “be well served to aim for a marketplace framework that functions well in the current environment but that also can stand the test of time.”

The government then asked the Committee to focus on “the following questions to help guide” the review:

 How can we ensure that the Copyright Act functions efficiently to foster a marketplace that is transparent, promotes innovation and access for users, and supports creators in getting fair market value for their copyrighted content?

 How can we ensure that the copyright framework continues to function in an environment of constant change in technology and business possibilities?

 Finally, how can our domestic regime position Canadian creators, users, and innovators to compete on and harness the full potential of the global stage?

Ministers Bains and Joly should be commended for their thoughtful approach to copyright reform.

Michael Geist criticized an early draft of the ministerial letter to the INDU Committee which he says contained the following passage that was not included in the final letter.

Let’s use this opportunity to move beyond the notion of balance. A lot, probably too much, has been said in the name of balance. It usually leads to polarized positions, leaving no room for finding common ground. In an era of reconciliation, we should aim to try to change this conversation too.

He also went on to state the following about that paragraph:

It should be noted that this passage wasIn fact, the word “balance” does not appear in the final letter, presumably reflecting the common ground between two departments that bring different perspectives to a challenging policy issue.

While the rejection of balance ended up on the cutting room floor, assuming the Canadian Heritage language reflects views within the department, it represents a significant departure from the current state of Canadian copyright law.

Geist’s conclusion about a shift in thinking about copyright by the Department of Heritage from a deleted paragraph in a draft letter, the origins and authors of which are not known or fully known, is quite a stretch. However, there is much to be said in the paragraph that would have warranted keeping it in.

The statement that “probably too much, has been said in the name of balance” and that it “usually leads to polarized positions” is true, as anyone who has lived through the copyright wars from 2005 to 2012 when the Copyright Modernization Act was enacted would know. When rights holders, for example, hear Geist talk about “balance” they know it is usually a call to hollow out an exclusive right, or to oppose a right or new remedy, or to argue for a broad new exception or weaker remedies, or for uncompensated uses of copyright materials. Undoubtedly, some people may believe that when rights holders use the term balance they are looking for more legal protection, control over and payment for the uses of their works. Balance is always something that is in the eye of the beholder.

The term “balance” is not only polarizing, it’s use doesn’t inform policy or policy makers to any specific or desirable course of action. For example, while one may refer to a “balanced budget” as a desirable fiscal goal, one would eschew any attempt to do any comprehensive law review in other areas by focusing on balance as a guiding principle. For example, one would not premise updating our laws related to tax, securities regulation, criminal law, immigration, energy, or housing, based on a principle of “balance” in the abstract. There would be more relevant guiding principles just as there are in copyright law.

The Supreme Court, as Geist has pointed out, has frequently used the term balance. But, it has made clear that the actual goals of copyright are not balance in an abstract sense. Rather it is to create incentives for and to reward creators and to promote access to works by the public. Therefore, focusing on legal frameworks that promote these goals is much more productive – and less polarizing – than focusing on some elusive concept of “balance”.

Moreover, the notion of balance is often characterized as a “zero sum game” in which a win for creators is a loss for users. That notion is untrue as the goal of providing the public with access to works cannot be achieved without providing appropriate incentives to creators. Both creators, users and the public benefit when copyright frameworks promote incentives to produce and distribute works and support functioning legal markets for creative products and services. The public suffers when inappropriate policy choices are shelved or good policy choices are traded away for poorer ones – including when the trade-offs are made to satisfy vocal advocates seeking to undermine copyright and necessary legal frameworks under a guise of pursing balance.

This convergence of interests between creators and users has been expressly recognized by the U.S. Supreme Court. For example, in Mazer v. Stein, 347 U.S. 201, 219, 98 L. Ed. 630, 74 S. Ct. 460 (1953), the U.S. Supreme Court recognized that the encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors. In Twentieth Century Music Corp. v. Aiken, 422 U.S. 15 (1975), the court stated:

The limited scope of the copyright holder’s statutory monopoly … reflects a balance of competing claims upon the public interest: creative work is to be encouraged and rewarded, but private motivation must ultimately serve the cause of promoting broad public availability of literature, music, and the other arts. The immediate effect of our copyright law is to secure a fair return for an `author’s’ creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good.

While the letter from the Ministers did not include the “balance” mantra, it did focus on right target, namely to find the appropriate legal frameworks for copyright. The impugned draft latter also included a call for the same inquiry.

This approach to copyright policy has a long pedigree in Canadian copyright law. This approach is similar to the framework described in the Preamble to the Copyright Modernization Act which stated its objectives were:

(a) to create a marketplace framework law and cultural policy instrument that through clear, predictable and fair rules will support creativity and innovation in the knowledge economy; (b) to address opportunities and challenges that are global in scope for the creation and use of copyright works or other subject-matter; (c) to adopt coordinated approaches to copyright protection based on internationally recognized norms including those reflected in the WCT and WPPT; (d) to provide rights holders with recognition, remuneration and the ability to assert their rights; to enhance users’ access to copyright works or other subject-matter; and (e) to enhance the protection of copyright through the recognition of technological measures and other measures, in a manner that promotes culture and innovation, competition and investment in the Canadian economy.

The Supreme Court of Canada in Éditions Chouette 1987 (Inc.) v. Desputeaux, 2003 SCC 17 (S.C.C.) also held that the Act should be construed having regard to one of its purposes which is to establish system designed to organize the economic management of intellectual property.

The government was right to focus on the real objectives of copyright. More than ever, Canadians need good forward thinking policies. These need to be pursued based on a shared vision of achieving the goals of copyright and not by seeking compromises with advocates arguing for balance with reform proposals that are inconsistent with appropriate legal frameworks that enable the creative commmunities, users and the public to flourish.

CASL

Almost everyone agrees that Canada’s anti-spam law needs fixing. The INDU Committee recognized this recommending numerous changes to CASL. ISED Minister Bains responded to the Committee leaving little doubt that CASL requires, among other things, clarification to make our anti-spam law “an effective law that protects [the public] from spam and other electronic threats while at the same time minimizing the cost and administrative burden of compliance for Canadian businesses, charities, and non-profit groups.”

The Committee had recommended that the government clarify:

the definition of “commercial electronic message” and notably the status of administrative and transactional messages vis-à-vis this definition;

whether electronic messages listed under subsection 6(6) of the Act fall under the definition of “commercial electronic message”;

how to best incorporate messages sent on behalf of an authorized person with regard to paragraph 6(2)(a) of the Act; and

the application of the Act and its regulations to charities and non-profit organizations.

Minister Bains on behalf of the government indicated that CASL will be clarified stating:

The government recognizes that the more explicit the legislation and its obligations are, the more effective the Act will be. We also intend to work closely with stakeholders to identify ways to improve the areas that are the object of the Committee’s recommendations. Clear obligations support both senders and consumers, and it is the government’s aim that the CASL be as clear as possible while remaining adaptable and neutral to technological developments.

The government response is a positive development. Fixing CASL is fully consistent with the government’s policy of removing red tape and promoting innovation. The government should move swiftly to recast this framework law to be more in accord with sound economic and public policy principles.

Privacy

The government has moved ahead with two important initiatives. First, in February 2018, the House of Commons Standing Committee on Access to Information, Privacy and Ethics tabled in the House of Commons a report entitled “Towards Privacy by Design: Review of the Personal Information Protection and Electronic Documents Act“. The Report makes 19 recommendations including an important recommendation to include an express “right to be forgotten”. The government has now also published the Regulations to the Digital Privacy Act and the Order in Council setting November 1, 2018 as the date the new provisions comes into effect.